The early start of the California wildfire season, which has burned more acres than the whole of 2019, coupled with the above-average hurricane season may add up to unprecedented losses in terms of property damage. Brokers, captive managers, and risk managers must take greater steps as past trends indicate the largest losses will occur later on in the year.
Rapid response to catastrophic weather events must take into consideration “the loss of available personnel both in the company’s claims department and at vendors who are needed for full and best response.” As Hurricane Laura lands in the middle of the Covid-19 pandemic, the preparation that has been done in months past are paying off for companies who planned and practiced for such events.
“Wildfires in 2020, even at this early stage of the California season, have already burned more acres than the whole of the 2019 season.”
Since the beginning of 2020, reports indicated an above-average hurricane season this year. Hurricane Laura’s upgraded status highlights the importance of preparing early and adjusting for increased threats in catastrophic weather events.
Captive formations have jumped more than 200% in the first half of 2020, particularly for property coverage. When considering whether captives is best for your company, businesses must determine their own risk appetites and fully establish their risk profile.
The California “Big One” has been predicted for years, but the earthquake coverage gap has widened while insurers aren’t always appropriately priced for the greater risk. If the Covid-19 pandemic has taught anything, it is that low-probability/high-impact events must be taken seriously and planned for.
“After a recurring pattern of [climate risks], they are starting to get priced in and risk premiums – which are reset annually – are adjusting to reflect the increased risk.” – Niklaus Hilti, Credit Suisse.
World Economic Forum – “With risk, the writing is always on the wall. We know the storm will eventually come, yet in most cases – when the storm hits – leaders are questioned about why they didn’t take more efforts to plan for a response. […]
While the commercial property insurance rates increased by a collective 19% this past quarter, an important caveat hidden in the data is the differences between different regions and markets. The Asia and Pacific region had less volatility, while the United States saw some of the steepest growth.
Derecho storms in the American Midwest knocked out power for 1m+ customers this week. As the 2020 hurricane season and Covid-19 occupy most minds, it is imperative to stay prepared for a wide berth of catastrophic events as weather risks continue to rise this year.